Turkey to exclude big power plants in privatisation process

Turkey has pushed through a series of privatisations, including roads, bridges, and electricity distribution grids, in an attempt to bring in much-needed foreign investment.

Turkey to exclude big power plants in privatisation process
Turkey will exclude its largest power stations in the long term from a power plant privatisation process to avoid electricity price imbalances, senior energy officials, who declined to be named, said on Friday.

"Some of the power stations will remain with EUAS (Electricity Production Corporation). These have a total capacity of around 7,500 megawatts (MW)," a senior official told Reuters.

Turkey aims to start privatising smaller power stations, currently owned by EUAS, this year, once an eletricity market law is approved by President Abdullah Gul.

Turkey has pushed through a series of privatisations, including roads, bridges, and electricity distribution grids, in an attempt to bring in much-needed foreign investment.

State-owned EUAS ownes 103 hydro-electricity stations and 19 thermal stations. Big power stations such as Ataturk, Keban, Karakaya and Karkamis will be kept out of the privatisation programme.

The official said the cost of production in construct-operate and construct-operate-sell power stations were high while EUAS's production costs were lower, helping to keep the average electricity price down.

"By using electricity at different costs the average electricity price is reduced and high price hikes are prevented," the official said. "With EUAS stations, energy supply is guaranteed and the prices are controlled," he said.

Turkey's energy watchdog had previously approved a price hike of more than 20 percent for industry, residences and business, starting from July 1.

Rises in energy prices have been a major component in Turkey's double-digit inflation. The Central Bank, which raised interest rates by 50 basis points late on Thursday, has repeatedly cited energy prices as an inflation risk.

Reuters
Last Mod: 18 Temmuz 2008, 17:09
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